Social 10-2
Chapter 13
Challenges and Opportunities of
Economic Globalization
Chapter Issue: To what extent does political and
economic globalization affect people’s lives?
Part 3 Issue: Does globalization contribute to a sustainable prosperity for all people?
Name: _____________________________
Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT
Social Studies 10-2 - Chapter 13
Challenges and Opportunities of Economic Globalization
Vocabulary
1.
deregulation- ____________________________________________________________
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Example: ____________________________________________________________________
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2.
privatization- ____________________________________________________________
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Example: ____________________________________________________________________
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3.
Crown Corporation- ______________________________________________________
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Example: ____________________________________________________________________
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4.
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5.!
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6.
AGT- ___________________________________________________________________
EUB- ___________________________________________________________________
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economic nationalism- ____________________________________________________
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7. ! FIRA- __________________________________________________________________
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Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT
8.
knowledge economy ______________________________________________________
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Example: ____________________________________________________________________
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9.
factors of production- _____________________________________________________
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Example: ____________________________________________________________________
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10.! sweatshop- _____________________________________________________________
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Example: ____________________________________________________________________
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Total:
Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT
/17 marks
Chapter 13 Challenges and Opportunities of
Economic Globalization
Chapter Issue:
To what extent does political and economic globalization affect people’s lives?
Does globalization contribute to sustainable prosperity for all people?
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*Should governments or private businesses be in charge of health care?
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*Should Canadians be concerned about child labour and sweatshops?
You might already work part time in order to help support your interests or to
save for your post secondary education. How would you feel if you lost your
job because your company moved its operations to a foreign country in order to
save money on wages? Some people feel that globalization of businesses help
spread the wealth to nations who cannot support themselves. Others feel that
free trade and trade reforms always hurt people, leaving someone in poverty.
What do you think??
The Impact of Trade Liberalization in Canada
Forms of Trade Liberalization (pages 217 - 219)
Trade liberalization means removing tariffs and quotas from imports or
removing barriers to increase trade. It can also mean removing government
regulations from Crown corporations or the outright sale of these corporations.
Crown corporations are usually created to provide services for people in areas
that private industries are NOT interested in. Examples of these services may be
postal, telecommunications or transportation.
In the 1990’s, the trend to reduce the role of government in business became
popular. Privatization meant selling these government owned business to
private individuals who could make a profit. Government owned businesses are
often subsidized (aided) by the government and therefore have an advantage
over privately owned businesses. Crown corporations are sometimes privatized
because the need for government services has changed or because governments
are pressured to do so by globalization.
Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT
The attraction of profit is one way that globalization puts pressure on
governments to privatize. The sale of the crown corporation provides cash for
the government and as result can lower taxes. Another way globalization puts
on pressure is that private companies cannot sell their products for more than the
subsidized one. This is seen as a obstacle to freer trade.
Deregulation of Alberta’s Energy Industry
In an ideal free market economy, businesses compete with one another to
provide the best product or service for the lowest price for the consumer.
However, the goal of business is to make a profit, not to necessarily provide the
best for the consumer. Before deregulation, Alberta’s electrical industry was run
by 3 privately run companies. Municipalities owned the distribution systems
for providing the electricity to its residents. Today, the electrical industry is
owned and operated by a mix of investor-owned and municipally owned
companies. The Energy and Utilities Board regulates the the rates of the electric
utilities. Following deregulation, the government set up a rebate program to
help Albertans deal with the higher electricity costs.
Foreign Investment and Ownership in Canada (pages 220 - 221)
Trade liberalization has also increased foreign investment and ownership in
Canada. Many Canadians are concerned that this foreign influence will cost us
our identity and economic independence. Economic nationalism means we do
NOT want to be taken over by the United States.
Control of Canada’s Economy
Due to the huge difference in population, it is very difficult for Canada to
compete economically with the United States. 86% of our exports goes to the
United States. Because of this, anything which occurs economically in the United
States also affects Canada. The United States has many large transnational
companies. It is easy for these large companies to buy out Canada’s much
smaller companies. In the 1970’s, there was a huge outcry in regards to this
occurrence. As a result, the federal Liberal government created the Foreign
Investment Review Agency in order to scrutinize foreign take overs and the
creation of new businesses by non-Canadians. The FIRA was replaced by
Investment Canada in 1984, by Prime Minister Mulroney to encourage foreign
Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT
investment in Canada. Since then, 11 000 Canadian businesses have been bought
by foreign companies. The Free Trade Agreement was signed with the United
States in 1988 and by 1992, this extended to the North American Free Trade
Agreement which included Mexico. (NAFTA)
Outward acquisitions- Canadian companies buying foreign companies
Inward acquisitions- Foreign companies buying Canadian companies
In 2005, China National Offshore Oil bought a $150 million share in MEG Energy,
an Alberta oil sands developer.
Some economists say that Canada should improve trade ties with other countries
in order to become less dependent on the United States as a trading partner.
Do you agree?
Is Chinese investment in the Alberta oil industry an example of “good” foreign
investment??
The Knowledge Economy
The Link between Globalization and the Knowledge Economy (pgs 222/223)
The knowledge economy has sped up the process of globalization. In order to
compete in the knowledge economy, governments need to:
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*develop education programs to promote knowledge workers
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*invest in online connectivity
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*invest in technology to build framework
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*stimulate innovation and creativity
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*pass laws to create security for businesses
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*create government web sites to help pursue economic activity
* work to change institutions to adapt to the new economy
The challenge of the knowledge economy is whether or not less developed
countries will be able to benefit from the transformed economy. Many
economists believe that the Internet and the knowledge economy will acutally be
powerful new tools to help less developed countries climb out of poverty.
Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT
Outsourcing
The challenge of the knowledge economy is whether or not less developed
countries will be able to benefit from it. Outsourcing is an issue that is
generating a great deal of media coverage. Outsourcing involves one company
contracting out work to another company in a less developed country in order to
get the work done more cheaply. In the 1980’s , the automobile industry began
to outsource parts of the production process in order to make a higher profit.
The outsourced plants in the textile industries are often referred to as sweat
shops where the wages are low and the working conditions are poor.
Supporters of sweatshops point out that although conditions are poor, the
people are better off than without them.
Read about what The Gap, Disney, and Walmart do with their workers
in less developed countries on page 228.
Is OUTSOURING our jobs to less developed countries providing an opportunity or more
a of a challenge to workers in the developing world?
Social Studies 10-2 - Challenges and Opportunities of Economic Globalization
Chapter 13 Questions
1. Provide three examples of trade liberalization.
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2.! What is one impact of trade liberalization on Canada?
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Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT
3.! Where and why are Crown Corporations created?
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4.! Explain the difference between the responsibilities of Crown Corporations and
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private corporations.
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5.!
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Provide 4 examples of Crown Corporations in Canada.
6. What trend began in the 1990’s?
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7.! How does globalization put pressure on governments?
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8.! Why is foreign investment a concern for some Canadians? What is this concern
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called?
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Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT
Part 2: The Knowledge Economy ! !
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9.! How has the knowledge economy affected globalization?
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10. What must governments do in order to be successful in the knowledge economy?
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11.! List 5 skills which are important to have in order for workers to be successful in
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the knowledge economy.
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12. What is the challenge of the knowledge economy? Why will less developed
countries be left out of this transformation?
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13.! How has outsourcing of car manufacturing affected workers in North America?
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Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT
14.! How has outsourcing affected the textile industries?
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15.! Describe the working conditions for the employees of Gap.
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16.! Describe the working conditions for the employees of Disney and Wal-Mart in
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Bangladesh.
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17.! In 1999, the International Labour Organization estimated that ________________
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children were working in Ecuador’s banana fields. Over 50% of these children
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do not go to ____________ because they have to help their families ____________.
18. Who is Educators for Social Responsibility and what do they do?
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Darcy Owen
Tuesday, January 28, 2014 2:41:52 PM MT